Andrew Leigh on Growth

Last night I attended your presentation on tax at the McKell Institute.

I am very pleased that you and the Labor Party are supporting the international efforts to combat tax avoidance and evasion. I particularly hope that you support assistance to developing countries to enable them to get up to speed with these new initiatives.

Like yourself I am concerned for the poor and the vulnerable. That is the reason why I asked the question about unlimited growth on a planet of finite resources and our need to plan for the Steady State Economy, rather than have it result from a collapse of our present system.

Others in the social justice and environment networks with which I am associated would be interested in the response you gave to my question.

Would you have any objection to me publishing the question and your reply on the internet?

I certainly do not want to misrepresent your views in any way. If there is any way you would like me to add to, delete from or change the text to reflect your views more accurately, I would be perfectly willing to do that.

Also, if you would wish me not to publish the text at all, I would also respect your wishes in that regard. Of course I do think the need to plan for the Steady State Economy is a critical issue that needs public discussion.

The question and your response are outlined below.

Yours sincerely,

Phil Jones

Firstly, my question is based on 3 premises that you may or may not agree with.

That infinite economic growth on a finite planet is not possible

It is not possible to have absolute decoupling of resource consumption from economic growth, even though we can have relative decoupling

That the Steady State Economy is inevitable perhaps within the next few decades.

So my question is:

What considerations are taking place within the Labor Party to plan for the Steady State Economy, or do you believe that it is safe just to wait and see what happens, to both the Australian economy and the world economy?

———————————————–

Dear Phil,

Thank you for coming to my talk, and for running the quote past me.

I’m happy for you to post it on your website, but have just corrected a few typographical errors:

I’m an unabashed pro-growth progressive and that is a position that is not always popular, so let me explain why I think growth is a good thing and is sustainable.

The physical weight of all US output is lower in 2014 than it was in the Year 1900. The United States, a century ago, was producing more “stuff” with a population living on much lower living standards and much smaller population than it is today and that’s essentially because the output of most workers has become weightless. In fact the output of everyone in this building [Grosvenor Place], is weightless output. If people in this building become twice as productive and if wages track productivity, which is something we need to keep a close eye on, then GDP can double. But we don’t need this building to be consuming twice as much stuff. Indeed, it may consume less “stuff” if we move to the “paperless office”, one of those slogans that few workplaces are yet to properly realise.

That growth is important and progressive is because it’s sluggish economies that hurt the most vulnerable the first. When you look at the 28 million people turfed out of work worldwide in the GFC they were disproportionately low skilled. They were disproportionately those that I and people in the Labor would describe as “our people”. And the people who get hurt when we cut back on Foreign Aid well they’re at the bottom of the distribution as well. And it’s hard to be generous to the poor at home and abroad without economic growth in the society.

So I do think it is possible. I do think we are able and ought to target the very real concerns that my ‘no growth’ friends have around the environment, resource use, carbon pollution, around urban air pollution through direct instruments for targeting those things rather than by stopping the engine of growth.